I am going to explain how important your Risk to Reward (R:R) ratio is in trading. By examining a system that uses a 4:1 risk reward ratio and testing it 100 times in a row. I will demonstrate how a system with a very low winning percentage actually makes tons of profits. This is a very important aspect for new traders to understand and I hope this demonstration emphasizes that point.
Link to the thread on babypips where I found this system:
SUBSCRIBE NOW: https://cutt.ly/8nWwXZj
Link to my Testing Performance Spreadsheet: https://cutt.ly/KnWwBSf
00:00 – Introduction
00:45 – Indicators
02:47 – Rules & Examples
05:35 – Test
05:57 – Testing Results
5 EMA (Built in Tradingview Indicator)
10 EMA (Built in Tradingview Indicator)
RSI (10) with a 50 median line (Built in Tradingview Indicator)
ATR Bands by Alexander TeaH (free TradingView Indicator) set at 2 times ATR. Link:
5 EMA crosses above the 10 EMA.
RSI crosses above the 50 line.
5 EMA crosses below the 10 EMA.
RSI crosses below the 50 line.
Where to place stop-loss
2 X ATR
#BeginnerTrading #BabyPips #TradingSystem
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.